E-Logistics: The Slowly Evolving Platform Undrepinning E-Business

E-Logistics: The Slowly Evolving Platform Undrepinning E-Business

Kim Hassall (University of Melbourne, Australia)
DOI: 10.4018/978-1-60566-026-4.ch214
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Abstract

By 1998, arguably some four years after the Internet’s general user beginnings, many commentators did not doubt that Internet based home shopping was on its way to revolutionize our lives. At the margin, it certainly allowed us another purchasing channel and for many retailers some 5% to 12% of differing goods is now done through an “e-store” or “emarketplace”. (Visser & Hassall, 2005). However, by 2001 a range of major e-business summits, perhaps very notable being the 44 nation OECD hosted e-transport and e-logistics summit in Paris (June, 2001), was beginning to demolish the euphoria of B2C. In its basic state, B2C was a very marginal business. But what of B2B? Yes, it is a bigger sector but how were the business rules and logistics strategies shaping up for network design, e-marketplace use, and logistic fulfilment changing when compared to the rapidly evolving B2C environment? The ICT sector rapidly began to assemble a host of B2B applications for Supply Chain Management and despite the “tech wreck” occurring towards the end of 2001, these highly expensive suites of products found some traction over the next three to four years. So, initially, the development of large logistics software packages such as I2, Baan, Descartes, and so forth, were offerings that the B2B sectors availed themselves of. However, besides the ICT developments in the B2B space, the evolution of new logistics strategies would prove themselves to be good, bad, and various shades in between, when examining the full end to end (E2E) e-business operations. Since 2001, a tide of interest has turned towards the adoption of fit for purpose e-logistic models to support the end to end functionality of e-business. Hassall (2003) describes a detailed survey for the international Postal Authorities as to what new e-logistics and e-business strategies should be developed. These ranged from new householder delivery choices, to global e-marketplaces being developed. Why this survey was important was because the global postal authorities are the largest combined B2C operator and also a growing B2B logistics supplier.
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Introduction

By 1998, arguably some four years after the Internet’s general user beginnings, many commentators did not doubt that Internet based home shopping was on its way to revolutionize our lives. At the margin, it certainly allowed us another purchasing channel and for many retailers some 5% to 12% of differing goods is now done through an “e-store” or “e-marketplace”. (Visser & Hassall, 2005). However, by 2001 a range of major e-business summits, perhaps very notable being the 44 nation OECD hosted e-transport and e-logistics summit in Paris (June, 2001), was beginning to demolish the euphoria of B2C. In its basic state, B2C was a very marginal business. But what of B2B? Yes, it is a bigger sector but how were the business rules and logistics strategies shaping up for network design, e-marketplace use, and logistic fulfilment changing when compared to the rapidly evolving B2C environment? The ICT sector rapidly began to assemble a host of B2B applications for Supply Chain Management and despite the “tech wreck” occurring towards the end of 2001, these highly expensive suites of products found some traction over the next three to four years. So, initially, the development of large logistics software packages such as I2, Baan, Descartes, and so forth, were offerings that the B2B sectors availed themselves of. However, besides the ICT developments in the B2B space, the evolution of new logistics strategies would prove themselves to be good, bad, and various shades in between, when examining the full end to end (E2E) e-business operations. Since 2001, a tide of interest has turned towards the adoption of fit for purpose e-logistic models to support the end to end functionality of e-business. Hassall (2003) describes a detailed survey for the international Postal Authorities as to what new e-logistics and e-business strategies should be developed. These ranged from new householder delivery choices, to global e-marketplaces being developed. Why this survey was important was because the global postal authorities are the largest combined B2C operator and also a growing B2B logistics supplier.

The Tools of E-Logistics

The staple of the world’s logistics is activated by orders generated by the use of the phone and the fax machine. This is true for small/medium enterprises (SMEs), small office/home office (SOHOs) and Medium Enterprises (MEs) involved in B2C, b2b (small business to small business) or b2B (small business to large business). In many ways it will be the customer requirements that eventually force the smaller enterprises into adopting the use of further enhanced Web based products so that the information flow and reporting of their product orders or dispatches can feed customer or client information systems. B2B logistic contracts will often have a predefined set of software systems in place for reporting, monitoring, and accounting. Usually these will be more expensive than the suite of systems that the SMEs, SOHOs, and so forth, will have at their disposal.

The above list of e-logistic options is a list of capabilities that either the customer may require, or the logistics supplier offers. It would be quite unusual for many major 3PLs (Third Party Logistic Providers) to supply all of these capabilities unless directed to, usually by the decree of a major client. However, a subset of these strategies ought to be examined by the supplier or the e-logistics provider fulfilling the service.

Key Terms in this Chapter

ICT: Information and Communication Technology.

Radio Frequency Identification: Active or passive tag or print based “label” that can be pre-programmed with specific data input fields. These fields emit data from active tags or can reflect embedded data for inactive tags when pulsed with specific electronic signals.

Tecso Model: Strategy for replenishment of grocery orders for delivery from existing supermarket stores rather than from a specialized, non retain pick/pack urban depots. Used by Tesco stores.

E-Logistics: The following definitions are variations on the theme that e-logistics utilises Web based tools in the support of e-business. Some definitions are fuller than others. The timing in the emergence of these definitions is also relevant. 1. Finnish (translation), E-logistics can be defined as the application of Internet based technologies to traditional logistics processes.2. German: (Translation) E-Logistics, Web based applications and services dealing with the efficient transport, distribution, and storage of products along the supply and demand chain.3. French: (Translation): E-Logistics A collection of the new logistic management practices for the Internet. 4. Forbes, “E-logistics” describes three core back-end processes required to get an order from the “buy” button to the bottom line: warehousing, delivery, and transportation, and customer interaction (usually handled through a call center where customers can ask questions, place orders, check on order status, and arrange for returns). In many cases, a different vendor handles each of these three separate functions. Managing them all successfully and simultaneously requires an in-depth understanding of each discipline. Integrating them with one another and with a corporation’s existing systems is even tougher. Source: www.forbes.com/specialsections/elogistics . 5. “The electronic activation of a set of physical logistic activities with associated electronic information flows that support e-Business.” ( Hassall, 2005 ) (presentation) http://www.smartsupplychain.com.au/seminars.cfm .

Electronic Data Interchange (EDI): Computer to computer interchange between two or more companies so such entities can enter a range of standard forms such as purchase orders, bills of lading, invoices, forward orders, stock replenishment, and so forth.

IV PL (4PLTM): Fourth Party Logistics Provider. The operation of end-to-end coordination and management of a logistics chain by direction to 3PL operators and often including the use of large scale IT systems that drive management, reporting, and scheduling activities. IV PL operators need not operate any 3PL activities themselves.

Reverse Logistics: The process of collecting, moving, storing used, damaged, or outdated products and/or packaging from end users.

3PL (IIIPL): Third party logistics provider. A diversified provider of logistics services that may include: warehousing, freight forwarding, longhaul and shorthaul transport, storage, inventory management, returns, tracking, performance monitoring, selected documentation, and so forth.

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